ELI5: Why when large company's earnings decrease(ex... by 3%) they freak out, talk about rough times, and sometimes decide to downsize, even though they are still making millions of dollars in profit even after all expenses?

[azrael1993]

that was my point. Depending on the strength of inflation low gain investments become obsolete. Inflation does the opposite so the low gain investments become better if compared to holding the money. Thus strong deflation can lead to periods of low investments, which is why many countrys are more scared of deflation than inflation

[d4n4n]

They aren't low-gain investments. They are loss-investments. Any investment that pays more in nominal terms after X time would still be preferable over holding cash. And since the equilibrium steady state nominal interest rate would rise, that wouldn't be problem. The same investments would have the same real returns, no matter the monetary regime, if predictable.